Hospitality Today: Why Australia’s Eateries are Booming & Busting Simultaneously

This 2019 episode strikes very relevant today; Phil Di Bella delves deep into a rather intriguing question: Why do we see numerous cafes and restaurants shutting their doors, even as new ones keep springing up? As we get ready for the festive season, Phil provides a comprehensive analysis of the factors at play in the hospitality sector and how it affect us, the consumers.

Main Points Addressed:
🔸 Supply and Demand: The current oversupply stems from outdated planning laws and developers pushing for more retail space, often leading to an abundance of food and beverage outlets.
🔸 Dilution Effect: More cafes with no unique selling proposition means dilution. Even if a cafe isn't popular, it still takes away business from others, leading to closures.
🔸 Consumer Behaviour: With rising expenses, consumers expecting more for less is unsustainable. Understand the actual cost behind that cup of coffee or plate of bacon and eggs.
🔸 Controllable vs. Uncontrollable Costs: Increasing costs, especially those beyond the control of cafe owners (like wages), are affecting profitability.
🔸 Understanding Developers: Many new establishments are opening because developers offer huge incentives to have operational businesses in their spaces.

Key Takeaways:

1. The oversupply problem arises from outdated planning laws and developer incentives.
2. Many cafes lack a unique selling proposition, leading to business dilution.
3. Consumer expectations need to be managed; prices reflect rising uncontrollable costs.
4. Hospitality is pivotal for Australia, providing skills to youngsters and acting as a country's backbone.
5. Compassion and understanding of the industry's challenges are essential when enjoying hospitality.

Phil passionately shares that hospitality has been a significant part of his life. This industry is not just about food and drink; it’s about experiences, skills, and the backbone of many communities. But with the current challenges, its sustainability is at risk.

When you're next sipping your coffee or savouring a meal out, take a moment to appreciate the intricacies of the industry that serves you. Understand the value, be patient, and support your local cafes and restaurants.

📢 Your Action: Next time you're in your favourite cafe or restaurant, appreciate the value they bring. Understand the costs behind their services. Share this knowledge with friends and family to ensure a sustainable future for hospitality.

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Produced by The Podcast Boss.

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